The owner of a now-defunct construction company has singled out one of the most powerful officials in Montreal city hall as being on the take – and also said nefarious actions extend beyond Montreal and into the federal government.

Robert Abdallah was accused of participating in a kickback system at the city of Montreal, during testimony before the Charbonneau Commission that is looking into the construction industry and its links to organized crime and politics.

Former construction boss Lino Zambito testified that when his company Infrabec was repairing sewer systems on Sherbrooke St., Abdallah ordered him to buy pipes he did not need from Tremca Group, or else he would lose the contract.

Zambito argued that it was cheaper and more effective to pour concrete directly on location, but in the end agreed to buy the expensive pre-fabricated pipes, as long as Infrabec was paid extra for the unnecessary work and supplies.

"If you want the project to go ahead, the pipes have to be bought from Tremca at the price you were told," said Zambito. "We will pay you and the difference of $300,000 in the pipes. It's the amount the men from Tremca, Mr. Caron, will have to pay Mr. Abdallah so that the project is approved by the city of Montreal."

Abdallah was centre of federal scandal

Abdallah resigned from his post in 2006 under a cloud of suspicion.

The federal government, and Prime Minister Stephen Harper's former Director of Communications Dmitri Soudas, tried to have Abdallah hired as president of the Port of Montreal in 2007.

Audio recordings obtained by the Globe and Mail and Radio-Canada showed construction company leaders Antonio 'Tony' Accurso and Bernard Poulin saying that Soudas was "the real boss of Quebec" and could get Abdallah named to the post.

Abdallah was eventually hired by Gastier Construction, another firm owned by Accurso.

Zambito’s testimony caused Quebec's inquiry to reverberate in the House of Commons. The federal government was forced to fend off opposition queries about its relationship with Abdallah and it stressed that, in the end, he didn't get the port job.

Harper's office also downplayed Abdallah's federal ties.

"We have no comment on the allegations made against former city of Montreal staff," a prime ministerial spokesman said in an email.

The allegations against Abdallah at the Charbonneau Commission have not been proven in court and he has denied them in media interviews.

The Conservatives have acknowledged that the government indicated a preference for Abdallah as president of the Montreal port board in 2007, as did the city of Montreal.

But the Conservatives denied any wrongdoing in the matter and said the decision was ultimately up to the Port Authority's board -- which selected another candidate, in any case.


Rizzuto as arbitrator

Zambito also said that in many cases, Vito Rizzuto had acted as a dispute-settler between construction firms, at one point telling Zambito that his company lacked the experience necessary to rebuild Acadie Circle.

Antonio Accurso, whose company won the Transport Quebec bid to rebuild the Acadie Circle, issued a written statement denying all of Zambito's allegations.

Accurso said that he never had any disagreement with Zambito, that he never asked Rizzuto to intervene on any aspect of the Acadie Circle bid, and that he never had a meeting with Rizzuto and Zambito.

The Acadie Circle has flooded half a dozen times since it was rebuilt in 2004.


SQ guarding Zambito

Following several days of explosive testimony, the Surete du Quebec has confirmed that it is guarding former construction company owner Lino Zambito.

SQ officers said Tuesday they are protecting the owner of the now-defunct Infrabec, as well as his home, his restaurant, and his father's residence.

They would not say how long they have been watching Zambito's back.

At the Charbonneau Commission Zambito has testified that many people working in Montreal's city hall were corrupt, with senior employees demanding a cut of municipal contracts.

Zambito testified on Monday that he had paid $400,000 to two people as part of the price necessary to win municipal contracts.

Municipal contracts examined

On Tuesday, Zambito spent much of the day going over 70 municipal contracts tendered in 2004 and 2005 and answering the questions of inquiry lawyers.

He said that by looking at company names and dollar figures, he could identify contracts where there was clear bid-rigging going on. In the cases where he didn't recognize the names of companies, or if the bids came in at a reasonable price, he said they clearly weren't fixed.

But in the majority of cases studied by commission lawyer Denis Gallant, Zambito said there was a manipulation of the process -- and he was actively involved in some of those cases.

In one case, Zambito discussed a contract that went to Accurso's Simard-Beaudry Construction, even though three or four companies were involved in the bidding for a $16 million sewer contract in 2005.

Zambito said the contract was awarded as a "political command." Early in the day, he said he didn't know where that order came from -- but in the afternoon he laid the blame with Frank Zampino, a man who was once the city's second-most powerful politician after the mayor.

"The businessmen weren't happy to see this project go to Simard-Beaudry, but the information sent to us was that there was a political command that the contract had to go to Simard-Beaudry," Zambito said.

He explained that collusion wasn't an exact science.

He said some company bosses told competitors exactly what amount to bid on a public tender. Zambito, for his part, said he gave competitors a certain dollar figure to bid over, which ensured he won the contracts that the cartel had assigned to him.

Meantime, the city of Montreal has suspended three employees following Zambito's testimony Tuesday.

Yves Themens, Michel Paquette and Francois Theriault all work in the city's infrastructure department.

They have been suspended without pay pending the outcome of an internal investigation at city hall.

With a report from The Canadian Press